NEW DELHI: In a major relief to the broadcasting sector, the government has relaxed the entry of foreign direct investment to go up to 100 per cent in most sectors while it has allowed entry beyond 49 per cent through the government route in others.
The FDI has been raised to 100 per cent in the case of uplinking or downlinking of non-news and current affairs channels.However, it has been raised marginally to 49 per cent for news and current affairs channels, though the government route. The figure until now was 26 per cent.
The FDI will be 100 per cent with investments above 49 per cent through the government route for teleports (setting up of up-linking HUBs/Teleports); Direct to Home (DTH); Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalisation and addressability); Mobile TV; and Headend-in-the Sky (HITS). The rules until now provided 49 per cent automatic and 74 per cent through the government route.
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It will be 49 per cent through the government route for MSOs or cable operators not undertaking upgradation of networks towards digitalisation and addressability; broadcasting content services, and terrestrial FM Radio (from 26 per cent).
Broadcasting along with manufacturing is among the fifteen sectors being covered under this are Limited Liability Partnerships, downstream investment and approval conditions; Investment by companies owned and controlled by Non-Resident Indians (NRIs); establishment and transfer of ownership and control of Indian companies; and increase of sectoral cap.
The proposed reforms also enhance the limit of Foreign Investment Promotion Board (FIPB) from current Rupees 3000 crore to 5000 crore, which will mean faster clearances of many crucial proposals in all sectors.
The proposal contains many other long pending corrections including those being felt by the limited liability partnerships as well as NRI owned Companies who seem motivated to invest in India. A few other proposals seek to enhance the sectoral Caps so that foreign investors do not have to face fragmented ownership issues and get motivated to deploy their resources and technology with full force.
Along with these sectoral reforms, DIPP has also been advised to consolidate all FDI related instructions contained in various notifications and press notes and prepare a booklet so that the investors do not have to refer to several documents of different time frames.
An official statement said that in the normal course, the Policy corrections in 16 areas would have taken at least one year to process and get approvals. “Thus, this action is a very dynamic step in terms of integrating the Indian Economy with the rest of the World for attracting investments and technology and generating employment for enhancement of income of the people of India.”
Commenting on the development, Viacom18 Group CEO and M&E CII national committee chairman Sudhanshu Vats said,”This seems to be an excellent way to flag off Diwali celebrations in the country. My compliments to our Prime Minister Narendra Modi ji and our Finance Minister Shri Arun Jaitley ji. Today’s announcement emphasises the need to align more industries to the automatic route of FDI, over the government regulated route, to enhance ease of raising capital. The increase in the FIPB limit from Rs 3000 crore to Rs 5000 crore expands its financial ambit thereby allowing for an increase in the quantum of proposals of interest. By opening up certain industries the focus will shift to exploring newer markets with growth potential. For the Media and Entertainment industry in particular, the news broadcasters, radio, mobile TV market, cable broadband networks and DTH will witness accelerated investor interest.”
The statement said India is the fastest growing economy among major Nations. The World Bank has improved India’s ranking by 12 places in the 2016 Study of Ease of Doing Business. FDI has gone up by 40 per cent. Several Global Institutions have projected India as the leading destination for FDI in the World. IMF has branded India as the brightest spot in the Global Economy whereas the World Bank projects India’s growth at 7.5 per cent and even better.
The Government had therefore launched Campaigns like ‘Make In India’ and ‘Skill India’. The latest in the series is the upcoming ‘Start-up India’ initiative.
India got FDI of $19.39 billion in the April-June period, which is a rise of 29.5 per cent over the year earlier.
Earlier this year, the Government had announced that Service Providers located in India providing services to foreign entities in the field of motion picture and video tape production and distribution service, motion picture projection service, radio and television services, radio and television transmission services, and sound recording will be rewarded to the extent of five per cent under the new Services Export from India scheme (SEIS).
The rate would be set on the net foreign exchange earned.
Recreational, Cultural and Sporting Services (other than audiovisual services), entertainment services (including theatre, live bands and circus services), News agency services, sporting and other recreational services will also receive rewards of five per cent.
Advertising services, Market research and public opinion polling services, Management consulting service, Services related to management consulting, Technical testing and analysis services, services incidental to manufacturing, Photographic services, Printing, publishing and Convention services will get rewards of three per cent.
The scheme, announced as part of simplified Foreign Direct Investment rules, provides for rewards to all Service providers of notified services, who are providing services from India, regardless of the constitution or profile of the service provider.
The SEIS replaces the ‘Served from India Scheme (SFIS)’ and will therefore apply to `Service Providers’ located in India’ instead of `Indian Service Providers’.
The rate of reward under SEIS would be based on net foreign exchange earned and the reward issued as duty credit scrip, would no longer be with actual user condition and will no longer be restricted to usage for specified types of goods but be freely transferable and usable for all types of goods and service tax debits on procurement of services/goods. Debits would be eligible for CENVAT credit or drawback.
